The Federal High Court has ordered that the bank accounts of suspected cryptocurrency users on ByBit, KuCoin, and other platforms have N548.6 million frozen by Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC), because of their alleged involvement in naira fluctuations.
The court froze the funds based on a September 3, 2024, motion that accused two prominent foreign cryptocurrency platforms, ByBit and KuCoin, of contributing to the depreciation of the Nigerian Naira.
This development is a part of a larger legal and prosecutorial effort by federal government agencies to deal with claims that foreign cryptocurrency platforms are evading taxes and violating foreign exchange laws.
Remember that in February 2024, two executives of the cryptocurrency platform Binance were detained by Nigeria’s security agency on the basis of information provided by the National Security Adviser. The information claimed to have involved money laundering and financing of terrorism on specific cryptocurrency exchange platforms.
According to Nairametrics, the EFCC has already filed a lawsuit against Binance and Tigran Gambaryan for $35.4 million worth of money laundering offenses.
ByBit, KuCoin, and several other anonymous cryptocurrency platforms are accused in this most recent motion of facilitating the “price discovery, confirmation, and market manipulation” that led to “distortions in the market, resulting in the naira losing its value against other currencies” by their Nigerian users.
In his affidavit, which Nairametrics exclusively obtained, EFCC investigator Okoro Philip claimed that Nigeria had made significant progress in recent months toward currency stabilization efforts by the Federal Government, as demonstrated by the dollar’s trade on the black market at N980 to $1.
He continued by saying that these gains were quickly undone on Thursday, April 18, 2024, when the dollar quickly rose on the black market from N1,250 to $1.
“These fluctuations were primarily driven by activities on platforms such as ByBit, KuCoin, and other similar cryptocurrency platforms,” he said, citing additional intelligence and investigation.
He stated that 22 bank accounts, domiciled in various Nigerian banks and described in the motion, belong to willing sellers of USDT, who provide their naira accounts to transfer the naira equivalent of the USDT.
He contended that the identified account holders are users of ByBit, KuCoin, and other foreign cryptocurrency platforms, who are not authorized to deal in foreign exchange, advertise, negotiate, or carry out cryptocurrency exchanges to naira and vice versa at rates detrimental to Nigeria’s financial system.
The prosecution accused the cryptocurrency platforms of deliberately ignoring the mandatory requirements under Nigeria’s anti-money laundering laws and regulations, enabling users of the platforms to operate under a cover of secrecy.
“ByBit is a cryptocurrency platform where the exchange of USDT (a digital dollar) to other currencies, including the naira, takes place. One USDT is approximately equivalent to one United States dollar (USD). The exchange rates determined by users of these cryptocurrencies adversely affect the value of the naira by artificially lowering its value.
“The proceeds of this manipulation go into the account of the willing seller,” the official added in the case marked FHC/ABJ/CS/543/2024.
